(Bloomberg) -- Shoprite Holdings Ltd. sees no respite from tough trading conditions outside its home market as Africa’s largest food retailer battles currency shortages and stricter regulation in several countries.

The owner of supermarket chains such as Checkers and U-Save has been growing in 14 territories outside South Africa to become a continent-wide superpower, but factors such as inflation -- particularly in Angola -- have hampered progress. That contributed to a 20% decline in earnings over the year through June.

“Persistently challenging trading conditions in the year ahead are likely to hamper our ability to return to profitability,” the Cape Town-based company said in a statement on Tuesday.

That’s not to say the grocer isn’t seeing opportunities outside South Africa -- it plans to open 29 stores in various countries in 2020 -- and its domestic performance is keeping sales growth on an upward trajectory. Revenue gained 3.6% over the year, made up of a 4.9% increase at home and a 0.9% rise elsewhere.

Inflation, particularly in Angola, has “reduced spending power and, therefore, our ability to maintain gross margins,” Shoprite said. “Foreign currency shortages and an increasingly onerous regulatory environment around the importation of products have hampered availability.”

Shoprite cut its dividend by 34% after problems with the introduction of a new IT system and some industrial action curbed first-half earnings. The shares traded 1.8% lower at 137.27 rand as of 11:33 a.m. in Johannesburg.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Bowker, Alastair Reed

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